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    In California’s Housing Fight, It’s Newsom vs. NIMBY

    Laws to encourage more development and denser housing don’t do much good if no one enforces them. As the state political calculus shifts, Gavin Newsom is trying to change that.By any objective measure, nothing that happens in Woodside, Calif., is going to make much difference to a state whose housing crisis is characterized by some of the nation’s highest rents and home prices and has more than 100,000 people living on its streets. The town, a wealthy enclave of the Silicon Valley, is less than 12 square miles and contains about 5,000 of California’s 40 million residents.But earlier this year, when Woodside’s government made a curious announcement that the town was being designated a sanctuary for mountain lions — a move that, as it happened, would also protect a hamlet of multimillion-dollar homes from a new law allowing duplexes across the state — the response was an object lesson in how California politics have shifted as housing has become voters’ primary concern.The Department of Housing and Community Development, California’s main housing agency, said it was investigating the mountain lion plan. The state attorney general followed with a letter (and a news release announcing the letter) that said the proposed sanctuary was illegal, and accused the town of “deliberately attempting to shut off the supply of new housing opportunities.”Along the way legislators, housing advocates and even the Sacramento-based Mountain Lion Foundation pilloried the move. Woodside reversed course after the Department of Fish and Wildlife advised city officials that it was impossible for the entire town to be considered a cougar habitat. Shortly after, the city announced it was taking applications for duplexes.Woodside, Calif., tried to declare itself a mountain lion habitat, a move that would have barred duplex housing in the town. The state pushed back.Jim Wilson/The New York TimesFor the past six years, through boom, bust and pandemic, California’s Legislature has ended each session with a blitz of new laws that aim to make housing more plentiful and affordable. Statewide rent control. Moves to encourage backyard units. A dismantling of single-family zoning rules. The barrage continued in this year’s session, concluded on Wednesday, when lawmakers passed a pair of measures that aim to turn retail centers, office buildings and parking lots into potentially millions of future housing units — moves that caused many political observers to reconsider what is politically possible.The laws received a decent amount of fanfare at each signing, signaling a turn in state policy and priorities. Until recently though, no one put much effort into enforcing them.That has started to change as Gov. Gavin Newsom has, for reasons practical and political, shifted toward an increasingly aggressive effort to enforce laws already on the books. This ranges from small-scale stings, like the state housing agency’s sending letters to local governments telling them that they are out of compliance with state housing regulations, to much larger efforts, like a first-of-its-kind investigation into San Francisco’s notoriously complex development process.In some cases, the governor’s office is working with the attorney general to initiate lawsuits against localities that they believe are breaking the law. Rob Bonta, the California attorney general, who along with Mr. Newsom is running for re-election this year, said he expected this to only get more intense.“We are just getting started,” he said in an interview.The policy is simple: Laws that are good enough to sign should be good enough to enforce. But there are political calculations as well, and they begin with a harsh reality. No matter how much legislation the state passes, its housing crisis is so deep and multifaceted that it will be nearly impossible to show real progress in any given political cycle, and probably not for decades.Read More on the Newsom AdministrationGasoline Cars: California is moving ahead with a ban on the sale of new internal-combustion vehicles in the state by 2035, as part of Gov. Gavin Newsom’s big climate plan,Injection-Site Bill: The governor vetoed a bill for supervised drug-injection sites in California, saying the state was not ready to put the idea into practice.Abortion: With the end of Roe v. Wade, Mr. Newsom vowed to “fight like hell” for abortion rights. His state is also looking to enshrine those rights in its constitution.Contentious Bills: The governor must decide whether to sign into law or veto several proposals that have drawn intense lobbying from both sides. Here is a closer look at some bills under consideration.That is a hard sell to voters who would like quick victories. Lacking a slam dunk to point to in campaign ads, Mr. Newsom and others have been applying the law, loudly. Take, for instance, the recent interview in which the governor told The San Francisco Chronicle that “NIMBYism is destroying the state” (referring to the “not in my backyard” attitude that impedes new housing). Or the mad rush to condemn Woodside. Or the Housing Strike Force that Mr. Bonta announced in November.“Over the last 50 or 60 years, cities have not made the right decisions collectively on housing,” said Jason Elliott, a senior counselor to Mr. Newsom who oversees housing policy. “That has left us in a place where the state has no choice but to enforce the law.”The notoriously complex development process in San Francisco is the focus of a state investigation.Jim Wilson/The New York TimesCalifornia has long been described as a look at the nation’s future, and in the case of housing, the good and bad, this frame has held true since the end of World War II. Today, as the rising cost of housing has ballooned into a national problem, state legislatures across the country have mirrored California by passing a host of new laws that aim to speed new development and allow denser forms of housing.The Biden administration is hoping to encourage these efforts with a “Housing Supply Action Plan,” which, among other things, would use grant funding as a carrot for local governments that liberalize their housing laws.Those reforms won’t amount to much if cities never follow them, however. And while that might sound obvious, passing laws that nobody follows has historically been where state housing policy began and ended. That’s because, in California and elsewhere, most of the power about where and how to build has traditionally been left to local governments, on the theory that land use is better handled by people closest to the problem.“The role the state was playing is that they would mostly advise cities on what to do and make recommendations,” said Ben Metcalf, who is managing director of the Terner Center for Housing Innovation at the University of California, Berkeley. He ran California’s Department of Housing and Community Development from 2016 to 2019.The problem is that homeowners and renters from a wide range of income levels are frequently antagonistic to having anything, and especially anything dense, built in their neighborhoods. And local elected officials are beholden to them. The result is that even though California has had various housing laws on its books for decades, cities regard them as pliable, and the state, in deference to local control, has rarely challenged them.“For decades there has been a pattern where cities flagrantly ignore state housing law and the state responds by halfheartedly saying, ‘Can you pretty please follow the law?’” said Laura Foote, executive director of YIMBY Action, a San Francisco Bay Area-based nonprofit that supports building more housing around the country. “Then the cities ignore them, and the state says, ‘OK, we’ll get you next time.’”Laura Foote, the executive director of YIMBY Action.Andrew Burton for The New York TimesUntil 2017, when a suite of new laws expanded the Department of Housing and Community Development’s authority, it wasn’t even clear if it had the power to penalize cities that weren’t following state housing dictates. Mr. Newsom’s administration has since used $4 million to create a housing Accountability and Enforcement unit to investigate cities and implement the laws, while legislators have usurped local authorities by forcing them to plan for more and denser housing, hemmed their options for stopping it, and created measures to strip them of land use power when they don’t comply.“It gives us something to ensure that these programs aren’t just writing,” said David Zisser, who heads the housing department’s new enforcement unit.As affordable housing problems spread, California’s enforcement kick could be an indication of an increasingly pitched battle between cities and states over housing. It also gives a clue into how Mr. Newsom might defend himself from political attacks over California’s housing and homelessness problems, something that is all but guaranteed to happen if he seeks higher office. (A Newsom run for the Democratic presidential nomination in 2024 is currently the stuff of political parlor games, and despite the chatter, the governor and everyone in his camp dismiss such ambitions.)In the interview, Mr. Elliott, the housing adviser, noted that the advantage the governor has in enforcing tough housing measures is that he draws votes from around the state instead of locally. The administration can play the heavy in a local dispute without having to worry about alienating its entire voting base.“It’s very logical, politically, for an individual city council person or an individual member of a board of supervisors to be against an individual project,” he said. “I think the job of the state is to change the political calculus so ‘yes’ becomes the default instead of ‘no.’”There is already some indication that years of state housing bills, combined with rising voter frustrations, have started to create such a shift. When the state housing department opened its investigation into San Francisco in August, London Breed, the city’s mayor, welcomed it with a tweet.“When I ran in 2018, it was a vulnerability to be an unapologetically pro-housing candidate,” said Buffy Wicks, a Democratic Assembly member from Oakland who wrote one of the two main housing bills passed by the Legislature this week. “Now it is absolutely an asset. I get up on the floor of the Assembly and I say, 10 times a week, ‘We have to build more housing in our communities, all of our communities need more housing, we need low-income, middle-income, market rate.’ You couldn’t do that in a comfortable way four years ago.”Cities seem to have absorbed the new reality of a state on closer watch. Last year, after the Legislature passed the duplex law, dozens of cities responded by adopting a slew of new ordinances that don’t explicitly prohibit the units but, through a series of tiny rules, tried to discourage anyone from actually building them.Woodside’s Mountain Lion proposal got the most attention but was far from the only one.When Temple City, in Los Angeles’s San Gabriel Valley, adopted rules for how it would carry out the duplex law — rules that required new units to have a large outdoor courtyard, the highest level of energy efficiency, and restricted future tenants from parking on site or obtaining permits to park on the street overnight — the City Council was clear what the aim was.“What we are trying to do here is to mitigate the impact of what we believe is a ridiculous state law,” said Councilman Tom Chavez, just before the Council unanimously passed the measure.By April, the Department of Housing and Community Development had warned Temple City that its new ordinance was likely in violation of at least five state housing laws. In an email, Bryan Cook, the city manager, said it was working with the state and would consider changing the ordinance after its work with the state was done. More

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    The Summer of NIMBY in Silicon Valley’s Poshest Town

    Moguls and investors from the tech industry, which endorses housing relief, banded together to object to a plan for multifamily homes near their estates in Atherton, Calif.SAN FRANCISCO — Tech industry titans have navigated a lot to get where they are today — the dot-com bust, the 2008 recession, a backlash against tech power, the pandemic. They have overcome boardroom showdowns, investor power struggles and regulatory land mines.But this summer, some of them encountered their most threatening opponent yet: multifamily townhouses.Their battle took place in one of Silicon Valley’s most exclusive and wealthiest towns: Atherton, Calif., a 4.9-square-mile enclave just north of Stanford University with a population of 7,500. There, tech chief executives and venture capitalists banded together over the specter that more than one home could exist on a single acre of land in the general vicinity of their estates.Their weapon? Strongly worded letters.Faced with the possibility of new construction, Rachel Whetstone, Netflix’s chief communications officer and an Atherton resident, wrote to the City Council and mayor that she was “very concerned” about traffic, tree removal, light and noise pollution, and school resources.Another local, Anthony Noto, chief executive of the financial technology company SoFi, and his wife, Kristin, wrote that robberies and larceny had already become so bad that many families, including his, had employed private security.Their neighbors Bruce Dunlevie, a founding partner at the investment firm Benchmark, and his wife, Elizabeth, said the developments were in conflict with Atherton’s Heritage Tree Ordinance, which regulates tree removal, and would create “a town that is no longer suburban in nature but urban, which is not why its residents moved there.”Other residents also objected: Andrew Wilson, chief executive of the video game maker Electronic Arts; Nikesh Arora, chief executive of Palo Alto Networks, a cybersecurity company; Ron Johnson, a former top executive at Apple; Omid Kordestani, a former top executive at Google; and Marc Andreessen, a prominent investor.All of them were fighting a plan to help Atherton comply with state requirements for housing. Every eight years, California cities must show state regulators that they have planned for new housing to meet the growth of their community. Atherton is on the hook to add 348 units.Many California towns, particularly ones with rich people, have fought higher-density housing plans in recent years, a trend that has become known as NIMBYism for “not in my backyard.” But Atherton’s situation stands out because of the extreme wealth of its denizens — the average home sale in 2020 was $7.9 million — and because tech leaders who live there have championed housing causes.The companies that made Atherton’s residents rich have donated huge sums to nonprofits to offset their impact on the local economy, including driving housing costs up. Some of the letter writers have even sat on the boards of charities aimed at addressing the region’s poverty and housing problems.Atherton residents have raised objections to the developments even though the town’s housing density is extremely low, housing advocates said.“Atherton talks about multifamily housing as if it was a Martian invasion or something,” said Jeremy Levine, a policy manager at the Housing Leadership Council of San Mateo County, a nonprofit that expressed support for the multifamily townhouse proposal.Read More About AppleSustained Growth: The tech giant reported a rise in sales of 2 percent for the three months that ended in June, though the company’s profits fell 10.6 percent.The End of a Partnership: Three years after Apple promised to continue working with Jony Ive, its former design leader, the two parties appear to be through. Here is what the change could mean for Apple.Union Effort: Apple employees at a Baltimore-area store voted to unionize, making it the first of the company’s 270-plus stores in the United States to do so.Upgrading: At its annual developer conference in June, Apple unveiled a range of new software features that expand the iPhone’s utility and add more opportunities for personalization.Atherton, which is a part of San Mateo County, has long been known for shying away from development. The town previously sued the state to stop a high-speed rail line from running through it and voted to shutter a train station.Its zoning rules do not allow for multifamily homes. But in June, the City Council proposed an “overlay” designating areas where nine townhouse developments could be built. The majority of the sites would have five or six units, with the largest having 40 units on five acres.That was when the outcry began. Some objectors offered creative ways to comply with the state’s requirements without building new housing. One technology executive suggested in his letter that Atherton try counting all the pool houses.Others spoke directly about their home values. Mr. Andreessen, the venture capitalist, and his wife, Laura Arrillaga-Andreessen, a scion of the real estate developer John Arrillaga, warned in a letter in June that more than one residence on a single acre of land “will MASSIVELY decrease our home values, the quality of life of ourselves and our neighbors and IMMENSELY increase the noise pollution and traffic.” The couple signed the letter with their address and an apparent reference to four properties they own on Atherton’s Tuscaloosa Avenue.The Atlantic reported earlier on the Andreessens’ letter.Mr. Andreessen has been a vocal proponent of building all kinds of things, including housing in the Bay Area. In a 2020 essay, he bemoaned the lack of housing built in the United States, calling out San Francisco’s “crazily skyrocketing housing prices.”“We should have gleaming skyscrapers and spectacular living environments in all our best cities,” he wrote. “Where are they?”Other venture capital investors who live in Atherton and oppose the townhouses include Aydin Senkut, an investor with Felicis Ventures; Gary Swart, an investor at Polaris Partners; Norm Fogelsong, an investor at IVP; Greg Stanger, an investor at Iconiq; and Tim Draper, an investor at Draper Associates.The mayor of Atherton said the townhouse plan wouldn’t have met California’s definition of affordable housing.Jim Wilson/The New York TimesMany of the largest tech companies have donated money toward addressing the Bay Area’s housing crisis in recent years. Meta, the company formerly known as Facebook, where Mr. Andreessen is a member of the board of directors, has committed $1 billion toward the problem. Google pledged $1 billion. Apple topped them both with a $2.5 billion pledge. Netflix made grants to Enterprise Community Partners, a housing nonprofit. Mr. Arora of Palo Alto Networks was on the board of Tipping Point, a nonprofit focused on fighting poverty in the Bay Area.Mr. Senkut said he was upset because he felt that Atherton’s townhouses proposal had been done in a sneaky way without input from the community. He said the potential for increased traffic had made him concerned about the safety of his children.“If you’re going to have to do something, ask the neighborhood what they want,” he said.Mr. Draper, Mr. Johnson and representatives for Mr. Andreessen, Mr. Arora and Mr. Wilson of Electronic Arts declined to comment. The other letter writers did not respond to requests for comment.The volume of responses led Atherton’s City Council to remove the townhouse portion from its plan in July. On Aug. 2, it instead proposed a program to encourage residents to rent out accessory dwelling units on their properties, to allow people to subdivide properties and to potentially build housing for teachers on school property.“Atherton is indeed different,” the proposal declared. Despite the town’s “perceived affluent nature,” the plan said, it is a “cash-poor” town with few people who are considered at risk for housing.Rick DeGolia, Atherton’s mayor, said the issue with the townhouses was that they would not have fit the state’s definition of affordable housing, since land in Atherton costs $8 million an acre. One developer told him that the units could go for at least $4 million each.“Everybody who buys into Atherton spent a huge amount of money to get in,” he said. “They’re very concerned about their privacy — that’s for sure. But there’s a different focus to get affordable housing, and that’s what I’m focused on.”Atherton’s new plan needs approval by California’s Department of Housing and Community Development. Cities that don’t comply with the state’s requirements for new housing to meet community growth face fines, or California could usurp local land-use authority.Ralph Robinson, an assistant planner at Good City, the consulting firm that Atherton hired to create the housing proposal, said the state had rejected the vast majority of initial proposals in recent times.“We’re very aware of that,” he said. “We’re aware we’ll get this feedback, and we may have to revisit some things in the fall.”Mr. Robinson has seen similar situations play out across Northern California. The key difference with Atherton, though, is its wealth, which attracts attention and interest, not all of it positive.“People are less sympathetic,” he said. More

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    Highlights From Today’s G.D.P. Report

    The top-line number for U.S. gross domestic product is a composite of positive and negative forces, and the details matter: Consumer spending, which powers the majority of the economy, rose 1 percent on an annualized basis, a marked slowdown from previous months as purchases of goods declined and spending on services grew only moderately.Home construction, also referred to as residential fixed investment, sagged 14 percent at an annual rate under the weight of rising interest rates, which have put mortgages beyond the reach of more would-be home buyers.Inventories, which measure the amount of stuff that’s been produced or imported but not yet sold, depressed the overall number by more than two percentage points on an annual basis. Companies still added to their inventories in the second quarter, but more slowly than in the first, which dragged down overall growth.Business construction, known as fixed investment in nonresidential structures, dove by 11.7 percent on an annual basis, as construction of factories and warehouses — also an interest rate-sensitive sector — slowed. Federal government spending shrank 3.2 percent on an annual basis, as stimulus money continues to fade out and oil was released from the Strategic Petroleum Reserve, although defense spending grew 2.5 percent as military aid flowed to Ukraine.Final sales to domestic purchasers, which some economists favor as a metric that cuts out volatile inventories and government spending, sank 0.3 percent.(All the figures are reported on a seasonally adjusted basis.) More

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    Highest Mortgage Rates Since 2008 Housing Crisis Cool Sales

    As the Federal Reserve tries to fight high inflation, costly mortgage rates have begun to price people out of the housing market.For the past two years, anyone who had a home to sell could get practically any asking price. Good shape or bad, in cities and in exurbs, seemingly everything on the market had a line of eager buyers.Now, in the span of a few weeks, real estate agents have gone from managing bidding wars to watching properties sit without offers, and once-hot markets like Austin, Texas, and Boise, Idaho, are poised for big declines.The culprit is rising mortgage rates, which have spiked to their highest levels since the 2008 housing crisis in response to the Federal Reserve’s recent efforts to tame inflation. The jump in borrowing costs, adding hundreds of dollars a month to the typical mortgage payment and coming on top of two years of home price increases, has pushed wishful home buyers past their financial limits.“We’ve reached the point where people just can’t afford a house,” said Glenn Kelman, chief executive of Redfin, a national real estate brokerage.Weekly average 30-year fixed mortgage rate

    Source: Freddie MacBy The New York TimesMore than any other part of the economy, housing — a purchase that for most buyers requires taking on huge amounts of debt — is especially sensitive to interest rates. That sensitivity becomes even more pronounced when homes are unaffordable, as they are now. As a result, home prices and new construction are a central component of the Federal Reserve’s efforts to slow rapid inflation by raising interest rates, which the central bank has done several times this year. But the Fed’s moves come with an inherent risk that the economy will spiral into a recession if they stifle home purchases and development activity too much.While housing does not account for a huge amount of economic output, it is a boom-bust industry that has historically played an outsize role in downturns. The sector runs on credit, and new home purchases are often followed by new furniture, new appliances and new electronics that are important pieces of consumer spending.“We need the housing market to bend to rein in inflation, but we don’t want it to break, because that would mean a recession,” said Mark Zandi, chief economist at Moody’s Analytics.Home prices are still at record levels, and they are likely to take months or longer to fall — if they ever do. But that caveat, which real estate agents often hold up as a shield, cannot paper over the fact that demand has waned considerably and that the market direction has changed.Sales of existing homes fell 3.4 percent in May from April, according to the National Association of Realtors, and construction is also down. Homebuilders that had been parsing out their inventory with elaborate lotteries now say their pandemic lists have shriveled to the point that they are lowering prices and sweetening incentives — like cheaper counter and bathroom upgrades — to get buyers over the line.Understand Inflation and How It Impacts YouInflation 101: What’s driving inflation in the United States? What can slow the rapid price gains? Here’s what to know.Inflation Calculator: How you experience inflation can vary greatly depending on your spending habits. Answer these seven questions to estimate your personal inflation rate.An Economic Cliff: Inflation is expected to remain high later this year even as the economy slows and layoffs rise. For many Americans, it’s going to hurt.Greedflation: Some experts say that big corporations are supercharging inflation by jacking up prices. We take a closer look at the issue. “There was this collective belief that housing was invincible — that it was so undersupplied and demand so high that nothing could stop price growth,” said Ali Wolf, chief economist with Zonda, a housing data and consulting firm. “A very rapid increase in interest rates and home prices has proven that theory to be false.”It is a stark change for a market that blossomed soon after the initial shock of the pandemic, which for many people turned out to be a perfect time to buy a home. Rock-bottom mortgage rates lowered borrowing costs, while the shift to home offices and Zoom meetings opened up new swaths of the country to buyers who had been struggling to penetrate the market near the jobs they once commuted to.That caused prices to explode in far-flung exurbs and once-affordable places like Spokane, Wash., where a crush of new home buyers decamped from pricey West Coast cities. People became so willing to move long distances to buy a home that “the normal laws of supply and demand didn’t apply,” Mr. Kelman said.After two years of swift price increases, however, places that once seemed cheap no longer are. Home values have risen about 40 percent over the past two years, according to Zillow, forcing buyers to stretch ever further in price even as they run out of geography.Now add in mortgage rates, which have nearly doubled this year. And inflation, which is eating into savings for some families as it increases household expenses. And a wobbly stock market, which has reduced the value of portfolios that many buyers intended to tap for a down payment.Larisa Kiryukhin and her husband are renting a home in Sarasota, Fla., after higher interest rates thwarted their purchase of a house.Todd Anderson for The New York TimesLarisa Kiryukhin and her family were long ago priced out of the San Francisco Bay Area, where they had lived for decades. Ms. Kiryukhin, 44, is a medical assistant who was tied to her hospital, but the pandemic gave her husband, who works in information technology, the flexibility to move to a more affordable city. So Ms. Kiryukhin switched jobs, and this year the couple and their two children moved to Tampa, Fla., in hopes of buying a home.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    California’s Housing Crisis and the Fight Over 20 Townhomes

    Susan Kirsch is a 78-year-old retired teacher who lives in a small cottage home in Mill Valley, Calif., on a quiet suburban street that looks toward a grassy knoll. A Sierra Club member with a pesticide-free garden, she has an Amnesty International sticker on her front window and a photograph on her refrigerator of herself and hundreds of other people spelling “TAX THE 1%” on a beach.The cause that takes up most of her time, however, is fighting new development and campaigning for the right of suburban cities to have near total control over what gets built in them. We met just before the pandemic, after Ms. Kirsch sent an email inviting me to coffee and in the note suggested that my reporting on the nation’s housing problems could benefit from her slow-growth perspective.We’ve become friendly in the two years since, and as I’ve absorbed her cheerful demeanor and come to appreciate her distrust of large institutions, I’ve tried not to reduce her philosophy to a single and oversimplified term. But just so we know what we’re talking about, Susan Kirsch is a NIMBY.NIMBY stands for “Not in my backyard,” an acronym that proliferated in the early 1980s to describe neighbors who fight nearby development, especially anything involving apartments. The word was initially descriptive (the Oxford English Dictionary added “NIMBY” in 1989 and has since tacked on “NIMBYism” and “NIMBYish”) but its connotation has harshened as rent and home prices have exploded. NIMBYs who used to be viewed as, at best, defenders of their community, and at worst just practical, are now painted as housing hoarders whose efforts have increased racial segregation, deepened wealth inequality and are robbing the next generation of the American dream.It seems like a lot to dump on what amount to hyperlocal disputes that largely consist of homeowners trekking down to city hall to complain about a new condominium building or proposed row of townhomes. But take a step back: What’s at stake in these disputes is the structure of American civilization. In a country with little national housing policy, the thicket of zoning, environmental and historic preservation laws that govern local land use are the primary regulators of a multi-trillion-dollar land market that is the source of most households’ wealth and form the map for how the nation’s economy and society are laid out.Around the country, cities and states that have struggled to tame rising housing costs are now trying to wrest control from neighborhood activists like Ms. Kirsch. Their logic is that too much of the power over whether new housing and infrastructure projects get built is left to a relatively small band of activists who pack late-night city meetings to tell their city councils that whatever is being proposed is “out of character” and should be built somewhere else — not in their backyard.To distinguish themselves from NIMBYs, the current generation of housing activists has adopted new “back yard” variants (YIMBY, “Yes in my backyard”; PHIMBY, “Public housing in my backyard”; YIGBY, “Yes in God’s backyard”) to declare how they are for things (everything, subsidized housing, building on church parking lots) that a NIMBY presumably is not. Politicians have piled on: In California, homeowners who are used to being catered to with a host of regulatory and tax policies recently woke up to discover that their governor, Gavin Newsom, told The San Francisco Chronicle, “NIMBYism is destroying the state.”Before we go any further, I am obligated to note that Susan Kirsch does not appreciate the word “NIMBY.” She describes herself as someone who helps communities “feel empowered and self-reliant.” She has, nevertheless, made peace with the term.After all, this is a person who once wrote an op-ed that said the removal of five trees in Mill Valley sent “existential messages to our fellow citizens of the world.” Who has fought for two decades to prevent a developer from putting 20 condominiums on a hill at the end of her street.Ms. Kirsch’s nonprofit, Catalysts for Local Control, opposes just about every law the California legislature puts forward to address the state’s housing and homelessness problem. In Zoom meetings with her members, she describes lawmakers’ intentions in dark terms and drives the message home with graphics that say things like, “Our homes and cities are under attack.”It might seem kitschy if it weren’t so effective. Susan Kirsch was 60 when she began her fight against the condos down the block. Eighteen years later, the hill remains dirt.The potential development site, which lies at the end of the road on which Ms. Kirch lives.Aaron Wojack for The New York TimesStories like that, one project fight after another, form a larger story about how the state and nation dug themselves into a growing housing shortage. The impulse behind NIMBYism is timeless: People who already live somewhere have always raised objections to newcomers. The feeling applies to renters as well as homeowners, crosses boundaries of race, class, and culture, and has been a part of urban life for centuries.But California has gone further than most in empowering it. And until fairly recently, this was seen as something to be proud of.That turnabout is what’s so baffling to activists like Ms. Kirsch. In the late 1970s, when she moved to Marin County, California was in the vanguard of an ideological backlash that created modern environmentalism and rejected the assumption that a growing economy and more people were always good — a cause that was championed by state and national politicians and celebrated everywhere from songs to magazine covers.California is now a different place with a different struggle, and a lack of housing is at its center. It’s not just that the $800,000 median home price is too expensive, or that the 100,000 people who sleep outside are a daily tragedy, or that the outflow of cost-of-living refugees has helped steer it into population decline. It’s that those statistics have raised hard questions about the state’s governance and sense of self.How does a place that prides itself on progressive politics have so many policies that exacerbate inequality? How do homeowners whose window signs say they welcome every oppressed group rationalize a housing system that has caused their own children to flee?Ms. Kirsch does not deny that California has a housing problem but has a different narrative about why. In her telling the state’s problems have little to do with the lack of housing — a diagnosis that unites basically every liberal and conservative economist along with the Obama, Trump and Biden administrations — but instead blames investors who buy single-family houses, big technology companies, and inequality generally.She wraps her opposition to development in a “small c” conservative philosophy that a smaller local government is better and more responsive to its citizens than a bigger one further away. Where many people see gridlock, she sees having her voice heard — and in the midst of a brutal housing crisis, fewer people want to listen.“It feels like huge forces conspiring to take away control from people at the lowest level at which they live,” she said.Yimbytown vs. NimbytownAlan Durning, the head of Sightline Institute, a Seattle think tank.Ruth Fremson/The New York Times“We are winning.”Alan Durning, founder of the Sightline Institute, a sustainability think tank that pushes for dense housing, was feeling triumphant. He was on a stage in Portland, Ore., addressing the 2022 Yimbytown conference, which bills itself as a gathering of pro-housing activists and draws heavily from the ranks of embittered millennials who feel locked out of the housing market and under the thumb of rising rents.Mr. Durning had just referenced a host of new state and local development laws — from California to Seattle, Minneapolis, Austin and Connecticut — that in the past two years have shifted the national conversation around housing. New rules that allow homeowners to build second homes in their yards. Sweeping legislation to discard single-family zoning restrictions that ban apartments in suburban neighborhoods. When he mentioned a more obscure set of rules that limit the amount of parking in new developments, someone in the crowd of 300 went “Woo!”A few weeks after the conference, the Biden administration released its own cheer in the form of a “Housing Supply Action Plan.” Among other measures, the plan aims to increase the nation’s supply of housing by using grant money to reward cities that reform land-use regulations in the manner Yimbytown celebrates. The administration pegged the nation’s housing shortage at 1.5 million units (other sources put it as high as 3.8 million).That deficit is the product of two main trends. The most recent one is the Great Recession, which left the home-building industry so hobbled that even now, 17 years after the housing bust began, new home construction has yet to eclipse the mid-2000s peak. The other built gradually over decades as cities installed a cat’s cradle of land use rules that empowered local NIMBYism and made housing scarcer and more expensive.In the hours before the Yimbytown gathering began, an unseasonable April snow fell on Portland’s streets. As attendees walked and Ubered to a Portland State auditorium for the conference, they passed sidewalk tents under a fresh layer of frost.“It puts a knot in our stomachs, a clutching feeling in our chests, we have feelings of fear about being excluded, about being pushed out, about being unwelcome, unable to keep up,” Mr. Durning said in his speech. “That’s what housing feels like in Nimbytown. But here in Yimbytown, we’re about the opposite of all that.”He added: “We want abundance of housing.”The word “abundance” was not incidental. It refers to an emerging framework that says many of America’s deepest problems stem from shortages — too few houses, not enough colleges, a lack of wind and solar projects — and the only way to solve them is to build.Encoded in YIMBY ideology is a belief that the best thing to do with NIMBYs is discard them. But since the successes of one generation become the burdens of another, they should first understand them.Small Is BeautifulAaron Wojack for The New York TimesForty-nine years earlier, Susan Kirsch was also young, idealistic and in Portland. She’d grown up on a farm in Minnesota, in a town with 1,400 people. After a series of urban teaching jobs broken up by trips from the Midwest to Washington, D.C., to protest the war in Vietnam, she took a yearlong road trip with a man she called “the adventure husband.” The final stop was Portland, and they rolled into town in a van.Back then, the idea that the activist circuit might include a stop at Yimbytown would have seemed preposterous. Instead of build baby build, the national feeling had swung from the post-World War II boom to a new posture that said three decades of mass suburbanization and urban redevelopment had created a crisis of too much.The pebbles to this backlash had been sprinkled through songs like the 1962 tract home satire “Little Boxes” (“And they’re all made out of ticky tacky/And they all look just the same”). Or the speech two years later in which President Lyndon Johnson warned of “an ugly America” beset by decaying cities and lifeless sprawl that a raft of social critics said were breaking community spirit and creating an epidemic of loneliness.Susan Kirsch was partial to “Small Is Beautiful,” which was published in 1973 by the economist E.F. Schumacher. The book cast doubt on a growth-at-all costs mentality and was but one entry in what the historian Kevin Starr called “this developing genre of population and land use apocalypse.”“Part of how it influences me is I think greater self-reliance and self-resiliency are qualities that keep a community or culture strong,” Ms. Kirsch said of the book. “And the trends we have now, with being able to have efficacy in your own life, is part of what I think is being diminished.”Instead of celebrating the arrival of new citizens, new power plants, new cloverleaf interchanges, California scholars started semi-seriously lamenting that they couldn’t require visas for people arriving from elsewhere in the United States. Environmental activists came to define themselves by what they could stop.“It became a politics of quality of life rather than a politics of prosperity,” said Jacob Anbinder, a Ph.D candidate at Harvard whose dissertation is on the emergence of anti-growth politics in the postwar period.Marin County, a woodsy enclave that sits across the Golden Gate Bridge from San Francisco, enacted some of the strictest growth control measures in the country — proudly. In the early 1970s, when a group of Marin homeowners mobilized to stop a nearby townhome development, the county commended them for distinguished public service.But housing fights could also be proxies for racial exclusion. Even though discriminatory practices such as redlining — banks refusing to offer mortgages in nonwhite neighborhoods — had been outlawed by federal civil rights legislation, economic segregation persisted. Today Marin County is the most segregated county in the Bay Area.Marin was Susan Kirsch’s next stop after Portland. She arrived in Mill Valley in 1979, where she remarried, had kids and stretched to buy a house for $112,500.Blithedale TerracePhil Richardson at his home, with plans for a housing development in Mill Valley, Calif.Aaron Wojack for The New York TimesPhil Richardson surveyed a tiny home on his dining room table. It was a model of a townhome he wants to build, and it lay atop a bath-towel-sized aerial photograph of Mill Valley.The model and the photo were one small piece of a growing archive of drawings, renderings and environmental reports that document Mr. Richardson’s failure to build two dozen condominiums on Kite Hill, a plot of trees and bushes that sits next to a small office building at the end of Ms. Kirsch’s block. Various proposals and millions of dollars in land, legal and consulting fees later, he has yet to placate neighbors.Mr. Richardson is a small-time developer who works from a home office decorated with models of World War II tanks and battleships. In a recent interview at his home, he recounted the time he met Ms. Kirsch to talk about his townhomes. She told him he should scrap it and build a park bench.He started the project in his late 60s and is now 86. He is determined to see it through. “My wife thinks I’m crazy,” he said. “I think the town could use the housing.”Later, he added: “I’d still like to know her motivation. Forget my project: What drives her bus?”Ms. Kirsch first heard about the proposal in 2004, after she got a public notice in the mail. The plan — then called Blithedale Terrace — was for 20 earth-toned townhomes with pitched roofs and wood shingles. She convened a group of neighbors in her living room to see if they had an opinion about it.“And we did,” she said.There ensued a decade of meetings, lots of legal back and forth, and a sign that said “Save Kite Hill.” The city also got a lot of letters. They said project was an “insane” idea that would create “unimaginable density” and lead Mill Valley toward an “LA like destruction.”Most of the letters raised questions about parking and traffic. Others voiced a more esoteric set of concerns, like “confusion for the post office.” One writer averred that anyone who lived in the new condos would be accepting a higher cancer risk, since their homes would be downwind from the wood-fired oven at a nearby restaurant.Mr. Richardson has been hoping to develop this site for 18 years.Aaron Wojack for The New York Times“From my backyard I see the hillside,” Ms. Kirsch wrote from her Hotmail account. “Explain how my property value is not deflated if open space is replace(d) with view-blocking, dense, unsightly buildings.”Mr. Richardson set Blithedale Terrace aside in 2013, nine years after proposing it, to focus on another development elsewhere. Ms. Kirsch used the dispute to launch a slow-growth platform.She’d fought the developer through a group called the Freeman Park Neighborhood Association. It morphed into a larger organization called Friends of Mill Valley, then a group called Citizen Marin. In 2016, having raised her profile through activism, Ms. Kirsch ran for the Marin County Board of Supervisors. She lost with 42 percent of the vote.“We’re all getting clobbered”In retrospect, 2016 was a turning point of a different sort. It marked the beginning of a blitz of state legislation that would force cities to accept higher density neighborhoods in the form of backyard units and duplexes that could no longer be prohibited by local governments, and even higher density in the future, after the state reformed a longstanding planning process to increase the amount of growth cities have to plan for. To make sure cities actually comply, Governor Gavin Newsom recently created an “accountability and enforcement unit,” a sort of NIMBY patrol that monitors whether or not localities are approving new housing.When you ask a planner or policy wonk how this happened, they point to a series of dull but important bills that were modest in isolation. Stacked together, however, they’ve shifted power over housing away from city councils to state bureaucrats and local planning and building departments — a move intended to prevent activists like Ms. Kirsch from having so much influence over whether new housing gets approved.They also got comparatively little press coverage or debate, because most of the attention was consumed by a more extreme series of bills proposed by Scott Wiener, a state senator from San Francisco, from 2018 to 2020. The bills had various forms — none passed — but would have forced California cities to allow four- to eight-story buildings within a mile of rail stations and bus stops, regardless of local rules.“I’m a former local elected official and former neighborhood association president — I am a huge believer in making decisions at a local level and people passionately tending to their community,” Mr. Wiener said in an interview. “But we’re going over the cliff, and whatever the benefits of local decision making, and there really are benefits, it has failed to produce the housing we need.”One afternoon in 2018, after traveling to San Francisco to hear Mr. Wiener talk about his plans at a police station, Ms. Kirsch and a group of furious attendees left the meeting for a nearby restaurant, where they founded a organization called Livable California. Its aim was to take the fight for local government to the statehouse.“The whole thing was, we’re all getting clobbered, we’ll have greater impact if we unify,” she said.Livable California is now the most recognized brand among a class of new groups protesting the state’s housing moves. The groups do things like organize neighborhood associations and produce research that paints the idea of a shortage as overblown. (This charge is discordant with the volumes of research on the topic, the state’s low per capita building rate, and its surfeit of illegal and overcrowded homes.)Many of the most active members are from wealthy enclaves like Marin, but the fight to maintain local control over housing attracts a more diverse group than the stereotype of a rich, suburban NIMBY would suggest. In California and around the country, activists who fight gentrification in cities frequently team up with suburban homeowners worried about development to oppose broad zoning reforms. Even if these groups don’t agree on housing policy, they often side with having those decisions made at the city or neighborhood level, where the political sphere is small enough that a group of volunteers can still be effective.“Community activists organize in person,” said Isaiah Madison, who is 26 and Black, a resident of Los Angeles’s historically Black Leimert Park neighborhood — and on the board of Livable California. “But when you take it to the state, you’re just a number. There are so many issues, and so much bureaucracy and politics and money, that community gets lost.”Over the course of several interviews, many of the most active homeowners expressed a feeling of upper middle-class regression. It seems unfair to them that people who did exactly what society told them to do — buy a house, get involved in their neighborhood — are now being asked to accept large changes in their surroundings.More than anything, they are furious how an epithet like “NIMBY” can reduce someone who cares about their neighborhood to a cartoon. Yes, they are the people who fight development. These are also the people who make and distribute lawn signs. Who attend late-night city meetings to ask probing questions about bids on the city’s dog-catching contract. Who organize the block party and help start library programs that everyone else takes for granted.“The state is crazy in trying to make all these cities their enemy,” said Maria Pavlou Kalban, who is on the board of directors of the Sherman Oaks Homeowners Association and recently founded a statewide homeowners’ and neighborhood group called United Neighbors. “These are people that are really seriously trying to answer the problem of ‘Where do our kids live?’”When the conversation shifts to solutions, however, the conundrum of local control resurfaces. In an interview, Ms. Kalban outlined a plan to build higher-density housing on high-traffic corridors, which sounds perfectly reasonable. It also sounds like the townhomes Mr. Richardson has been trying to build since 2004.The Homevoter HypothesisPlans for Mr. Richardson’s development.Aaron Wojack for The New York TimesHousing is a “bundled purchase,” or a big decision governed by a million little variables: The number of bedrooms, the size of the yard, the quality of local schools, proximity to work, family and transit. Hanging over all of this is, of course, the price.Housing politics is driven by emotion, specifically the fear of losing what you have. The economist William Fischel, a professor at Dartmouth, laid out the financial dimensions in a theory — “The Homevoter Hypothesis” — that holds NIMBYism is a form of insurance. Since you can’t buy a policy that will protect you from the neighborhood going to hell, the thinking goes, people compensate by packing planning meetings to fight anything (be it a dump, a freeway or a low-rent apartment complex) they perceive as a threat.People usually get involved in local politics for a distinct reason — they are angry at their school board, for instance, or worried about a condo complex at the end of their street — but they stay involved because they make friends and derive purpose from the work. It becomes something to do.Aaron Wojack for The New York TimesOver the past two decades, Susan Kirsch said she has spent almost as much time on her deck drinking wine and talking housing with fellow activists as she does with longtime friends.In our own conversations she dedicated as much energy to railing about how corporations are too big and billionaires too under-taxed, and inequality so troubling, as she did to the state housing policy. And so I asked the obvious question: With so many things to be angry about, why spend so much time fighting some condos?“I suppose it is just that feeling of home,” she said. “Just that feeling of home and the safety and security and groundedness that goes with having a safe place to go to at the end of the day, where you can believe you can have security, you don’t need to worry about how are you going to have money for both food and insurance and dental care for your kids and all of those things, that metaphor of home as a place of comfort.”The natural follow-up was what about the next generation, who say they are fighting for that too? She defaulted to neighborhood control.“Local communities would do a much better job of solving these problems,” she said. “Using the language of centralized power is what charges me to do this — I think small is beautiful.”Mr. Richardson recently put forth a new proposal for Kite Hill. This time it would consist of 25 condos that range from 800 square feet to 2,100 square feet, including six subsidized units for households making around or below the area median income. He’s feeling better about his chances thanks to changes in state law, but, at 86, is getting short on time.“I’m going to win or I’m going to die,” Mr. Richardson said. “It’s one or the other.”The city has yet to schedule a public hearing on the new proposal, but he is hopeful there will be one later this year. Whatever the date, Susan Kirsch plans on being there. She has some things to say. More

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    For Tens of Millions of Americans, the Good Times Are Right Now

    Their houses are piggy banks, their retirement accounts are up and their bosses are eager to please. When the boom ends, everything will change.This is an era of great political division and dramatic cultural upheaval. Much more quietly, it has been a time of great financial reward for a large number of Americans.For the 158 million who are employed, prospects haven’t been this bright since men landed on the moon. As many as half of those workers have retirement accounts that were fattened by a prolonged bull market in stocks. There are 83 million owner-occupied homes in the United States. At the rate they have been increasing in value, a lot of them are in effect a giant piggy bank that families live inside.This boom does not get celebrated much. It was a slow-build phenomenon in a country where news is stale within hours. It has happened during a time of fascination with the schemes of the truly wealthy (see: Musk, Elon) and against a backdrop of increased inequality. If you were unable to buy a house because of spiraling prices, the soaring amount of homeowners’ equity is not a comfort.The queasy stock market might be signaling that the boom is ending. A slowing economy, renewed inflation, high gas prices and rising interest rates could all undermine the gains achieved over the years. But for the moment, this flood of wealth is quietly redefining retirement, helping fuel Silicon Valley and stoking a boom in leisure and entertainment. It is boosting corporate profits by unprecedented amounts while also giving just about everyone the notion that a better job might be within reach.More than 4.5 million workers voluntarily quit in March, the highest number since the government started keeping this statistic in 2000, the Bureau of Labor Statistics reported last week. A few years ago, the monthly total was between three million and 3.5 million.“Maybe it’s easier to focus on the negative, but a huge number of people, maybe 40 million households, have been doing pretty well,” said Dean Baker, an economist who was a co-founder of the liberal-leaning Center for Economic and Policy Research. “You’d have to go back to the late 1990s to find a similar era. Before that, the 1960s.”This widespread wealth throws light on why the number of workers who say they expect to be working past their early 60s has fallen below 50 percent for the first time. It accounts for the abundance of $1 billion start-ups known as unicorns — more than 1,000 now, up from about 200 in 2015. It offers a reason for the rise in interest in unionizing companies from Amazon to Apple to Starbucks, as hourly workers seek to claim their share.And it helps explain why Dwight and Denise Makinson just returned from a 12-day cruise through Germany.“Our net worth has reached the millionaire level due to our investments, which was unfathomable when we were married 40 years ago,” said Mr. Makinson, 76, who is retired from the U.S. Forest Service.The couple, who live in Coeur d’Alene, Idaho, have company. There are 22 million U.S. millionaires, Credit Suisse estimates, up from fewer than 15 million in 2014.The State of Jobs in the United StatesThe U.S. economy has regained more than 90 percent of the 22 million jobs lost at the height of pandemic in the spring of 2020.April Jobs Report: U.S. employers added 428,000 jobs and the unemployment rate remained steady at 3.6 percent ​​in the fourth month of 2022.Trends: New government data showed record numbers of job openings and “quits” — a measurement of the amount of workers voluntarily leaving jobs — in March.Job Market and Stocks: This year’s decline in stock prices follows a historical pattern: Hot labor markets and stocks often don’t mix well.Unionization Efforts: Since the Great Recession, the college-educated have taken more frontline jobs at companies like Starbucks and Amazon. Now, they’re helping to unionize them.“I used coupons to buy things. One of my daughters would say, ‘Mom, that’s so embarrassing,’” said Ms. Makinson, 66, a registered nurse. “But we believed in saving. Now she uses coupons, too.”Denise and Dwight Makinson in their backyard in Coeur d’Alene, Idaho. Their net worth has reached the millionaire level.Margaret Albaugh for The New York TimesEvery economic transaction has several sides. No one thought home prices in 2000 were particularly cheap. But in the last six years, prices have risen by the total value of all housing in 2000, according to the Case-Schiller index. In many areas of the country, it has become practically impossible for renters to buy a house.This is fracturing society. Even as the overall homeownership rate in 2020 rose to 65.5 percent, the rate for Black Americans has severely lagged. At 43.4 percent, it is lower than the 44.2 percent in 2010. The rate for Hispanics is only marginally better.That disparity might account for the muted sense of achievement.“It’s a time of prosperity, a time of abundance, and yet it doesn’t seem that way,” said Andy Walden, vice president of enterprise research at Black Knight, which analyzes financial data.Shawn and Stephanie McCauley said the value of their house 20 miles north of Seattle had shot up 50 percent since they bought it a few years ago, a jump that was typical of the market.“We are very fortunate right now given the situation for many others during the pandemic,” said Mr. McCauley, 36, who works for a data orchestration company. “Somehow we are doing even better financially, and it feels a bit awkward.”Even for those doing well, the economy feels precarious. The University of Michigan’s venerable Index of Consumer Sentiment fell in March to the same levels as 1979, when the inflation rate was a painful 11 percent, before rising in April.Politicians are mostly quiet about the boom.“Republicans are not anxious to give President Biden credit for anything,” said Mr. Baker, the economist. “The Democrats could boast about how many people have gotten jobs, and the strong wage growth at the bottom, but they seem reluctant to do this, knowing that many people are being hit by inflation.”The initial coronavirus outbreak ended the longest U.S. economic expansion in modern history after 128 months. A dramatic downturn began. The federal government stepped in, generously spreading cash around. Spending habits shifted as people stayed home. The recession ended after two months, and the boom resumed.Jerome H. Powell, the Federal Reserve chair, recently warned that there were too many employers chasing too few workers, saying the labor market was “tight to an unhealthy level.” But for workers, it’s gratifying to have the upper hand in looking for a new position or career.“Both my husband and I have been able to make job changes that have doubled our income from five years ago,” said Lindsay Bernhagen, 39, who lives in Stevens Point, Wis., and works for a start-up. “It feels like it has mostly been dumb luck.”A decade ago, the housing market was in chaos. Between 2007 and 2015, more than seven million homes were lost to foreclosure, according to Black Knight. Some of these were speculative purchases or second homes, but many were primary residences. Egged on by lenders, people lived in houses they could not easily afford.Now the reverse is true. People own much more of their homes than they used to, while the banks own less. That acts as a shield against foreclosures, which in 2019 were only 144,000, according to Black Knight. (During the pandemic, foreclosures mostly ceased due to moratoriums.)The equity available to homeowners reached nearly $10 trillion at the end of 2021, double what it was at the height of the 2006 bubble, according to Black Knight. For the average American mortgage holder, that amounts to $185,000 before hitting loan-to-value tripwires. The figure is up $48,000 in a year — about what the average American family earns annually, according to some estimates.Even very new homeowners feel an economic boost.“We never had enough for a down payment, but then in summer of 2020, we got a good tax return, a stimulus check and had a little money in the bank,” said Magaly Pena, 41, an architect for the federal government. She and her husband bought a townhouse in the Miami suburb of Homestead.Ms. Pena, a first-generation immigrant from Nicaragua, likes to check out the estimated value of her house and her neighbors on the real estate website Redfin. “Sometimes I’ll check it every day for three days,” she said. “It’s been crazy — everything has skyrocketed.”In 2006, homeowners cashed in their equity. Sometimes they used the money to double down on another house or two. In 2022, there’s little sense of excess. One reason is that lenders and the culture in general are no longer so encouraging about that sort of refinancing. But owners are also more cautious.Brian Carter, an epidemiologist in Atlanta, said he and his wife, Desiree, had about $250,000 in equity in their home but didn’t plan to draw on it.“I was 27 in 2007 and watched a lot of people lose their houses because they couldn’t leave their equity alone,” he said. “That included my next-door neighbor and the family across the street. I don’t want to worry.”Those who take a boom for granted often get upstaged by reality. In May 2000, the entrepreneur Kurt Andersen said raising money for a media start-up called Inside was as easy “as getting laid in 1969.” That was a few weeks after the stock market peaked. Seventeen months and one merger later, Inside shut down. (Mr. Andersen clarified in an email that he did not actually have sex until the 1970s.)In 2000, the start-up downturn was the first sign of wider economic trouble. This time it may be simply that people are doing too well. “U.S. households in best shape in 30 years … but does it matter?” Deutsche Bank asked in a research note last month.Its logic: Households have more cash than debt for the first time in decades, which is theoretically good. But all that money is encouraging spending, which is propelling inflation, which is forcing the Fed to push up interest rates. The result: a recession late next year.Ashley Humphries, 31, feels prepared for most any scenario. Six years ago, she was a graduate teaching assistant making $12,000 a year. Now she earns a low six figures as a senior product manager for a parking app developer in Atlanta.“I’ve lived out some childhood dreams like dyeing my hair vibrant colors and seeing ‘Phantom of the Opera’ from the front row,” Ms. Humphries said. She got a dog named Kylo, put a bit of her income in the stock market and bought a Tesla. She just left on a Caribbean cruise. Two of them, in fact, one after the other.Ashley Humphries and Kylo. “I’ve lived out some childhood dreams,” she said.Kendrick Brinson for The New York Times More

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    How Rising Mortgage Rates Are Affecting the Housing Market

    Mortgage costs have jumped as the Federal Reserve has raised rates. With higher rates come fewer offers.Luis Solis, a real estate agent in Portland, Ore., marked a milestone weekend late last month. It was the first time in two years that one of his listings made it to Monday without any offers.This particular house was listed at $500,000, and after a Saturday open house there were promises of at least three bids, including one for $40,000 over the asking price. Then Monday came, and there were none. Then Tuesday, and Wednesday. An offer finally came in, but instead of being 10 to 15 percent higher than the listing — something that became almost standard at the height of the coronavirus pandemic’s housing market — it was right at $500,000. And it was the only one. And the buyer took it.“We didn’t have the competing offers that would drive up the price,” Mr. Solis said. “It’s not crazy like it was.”Taking some air out of the crazed market — and the hot economy in general — is precisely what the Federal Reserve wanted to do when it raised its key interest rate in March and signaled more increases to come. Mortgage rates have surged in response, jumping to 5 percent from slightly more than 3 percent since the start of the year.That rise means the monthly payment on a $500,000 house like the one Mr. Solis just sold would be about $500 more a month than it was at the end of last year, assuming a fixed-rate mortgage and 20 percent down payment. And the higher cost comes on top of a more than 30 percent rise in home prices over the past two years, according to Zillow.Now early data and interviews across the industry suggest that many buyers have finally been exhausted by declining affordability and cutthroat competition, causing the gravity-defying pandemic housing market to start easing up.Open houses have thinned. Online searches for homes have dropped. Homebuilders, many of whom have accrued backlogs of eager buyers, say rising mortgage rates have forced them to go deeper into those waiting lists to sell each house. In a recent survey of builders, Zelman & Associates, a housing research firm, found that while builders were still seeing strong demand, cancellations had inched up, though still well below historically low levels. Builders have also grown increasingly concerned about rising mortgage rates and surging home prices.“There is a lot more concern than there had been,” said Ivy Zelman, chief executive of Zelman & Associates.By any standard that prevailed before 2020, this would be a hot real estate market. Home prices remain high, and not only is there little sign they will fall anytime soon, but many economists predict a continued rise through the year. Still, after two years of torrid demand, agents had become accustomed to fielding multiple offers for each listing and setting price records each weekend. That frenzy, brought on by pandemic migrations and the growing centrality of the home as a space where people both live and work, is now subsiding.“We’re seeing some early indications that a growing share of home buyers, especially in expensive coastal markets, are getting priced out,” said Daryl Fairweather, chief economist at Redfin.Understand Inflation in the U.S.Inflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Your Questions, Answered: Times readers sent us their questions about rising prices. Top experts and economists weighed in.Interest Rates: As it seeks to curb inflation, the Federal Reserve announced that it was raising interest rates for the first time since 2018.How Americans Feel: We asked 2,200 people where they’ve noticed inflation. Many mentioned basic necessities, like food and gas.Supply Chain’s Role: A key factor in rising inflation is the continuing turmoil in the global supply chain. Here’s how the crisis unfolded.For buyers, however, the market will still feel plenty competitive. Even if prices aren’t rising at the pace of the past two years, homes are selling within a week of being listed and posting no significant price declines.Construction in Missoula, Mont. Among homebuilders, “there is a lot more concern than there had been,” said Ivy Zelman of Zelman & Associates.Tailyr Irvine for The New York TimesThat rising mortgage rates have not had more of an effect shows how difficult it is to tamp down prices and bring demand into balance in an economy where a lack of supply — marked by half-empty car lots, furniture order backlogs and a paucity of homes for sale — is playing a guiding role.In the prepandemic world of bustling offices and smoothly functioning supply chains, such a steep rise in mortgage rates, on top of years of double-digit price appreciation, would have economists predicting a severe drop in demand and maybe even falling prices. Those trends would have echoed through the broader economy, with fewer people spending on moving vans and new couches, and as existing homeowners felt on less solid financial footing and potentially curbed their own spending. Instead, economists are predicting that prices will continue to rise — by double digits in some forecasts — through the year.“I don’t think it’s going to stop the housing market,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association.The problem is there are so few homes for sale that even a slower market is unlikely to create enough inventory to satisfy demand anytime soon. For years the United States has suffered from a chronically undersupplied housing market. Home building plunged after the Great Recession and remained at a recessionary pace long after the economy and job market had recovered. Even today, the pace of home building remains below the heights of the mid-2000s, before the 2008 financial crisis and housing market crash.This makes it a good time to be a seller — assuming you don’t need to buy. Christopher J. Waller, a governor at the Fed, is living this out.“I sold my house yesterday in St. Louis to an all-cash buyer, no inspection,” Mr. Waller said in panel discussion on Monday. “But I’m trying to buy a house in D.C., and now I’m on the other side, going: ‘This is insane.’”He noted that the sharp rise in mortgage rates over recent months should have an effect on what happens with housing.The recent lack of new building was not for lack of interest. Members of the millennial generation, now in their late 20s to early 40s, are in their prime home buying years. Their desire to buy houses and start families has collided with scant supply, leading to an increase in prices.Shutdowns in the early months of the pandemic slowed home building, but housing starts have been on an upswing lately. New home completions remain low, however, because the tight labor market and supply chain disruptions have homebuilders scrambling to find wood, dishwashers, garage doors — and workers.Inflation F.A.Q.Card 1 of 6What is inflation? More

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    Treasury Shifts Cash Among States as Pandemic Housing Aid Dries Up

    The Biden administration pulled back the aid from states and counties with unspent funds and diverted it to four states pressing for more: California, New York, New Jersey and Illinois.WASHINGTON — The Biden administration has clawed back $377 million in federal emergency housing aid from states and counties, most of them controlled by Republicans, and redirected the cash to states that have been clamoring for more help, including New York, California and New Jersey.The $46 billion Emergency Rental Assistance Program, first enacted by Congress in 2020, succeeded in preventing a wave of evictions stemming from the downturn caused by the pandemic. But Treasury Department officials, increasingly concerned that evictions might rise after the program winds down, have tried to ensure that none of the remaining funding goes unspent while pushing states to find other funding sources to assist poor tenants.In recent months, White House officials have pressured governors in states with unspent funds to turn over the money to local governments within their states. Now they are going one step further, pulling back cash from states with relatively few tenants — like Montana, Nebraska, South Dakota and Wyoming — or localities that failed to efficiently distribute the aid, including Alabama, Arkansas and several counties in Texas.The money, in turn, is being diverted to four states that burned through their allotted amounts — with $136 million in additional aid headed to California, $119 million to New York, $47 million to New Jersey and $15 million to Illinois, according to a spreadsheet provided by a senior administration official. North Carolina, Washington and other localities will be receiving smaller amounts.New York officials were happy with their windfall but said it fell far short of the $1.6 billion in additional aid requested by the state.“This is better,” said Representative Ritchie Torres, a Democrat whose district includes the South Bronx, which has some of the highest eviction and poverty rates in the country. “But it’s a pitiful drop in the bucket compared to what we need.”The four states, home to roughly a third of the nation’s low-income renters, have already spent billions in emergency aid paying back rent for tenants at risk of eviction, and they have requested more funding, citing affordable housing shortages and rising rents. In January, their governors — Gavin Newsom of California, Kathy Hochul of New York, Philip D. Murphy of New Jersey and J.B. Pritzker of Illinois, all Democrats — called on Treasury Secretary Janet L. Yellen to shift cash from low-spending states into their accounts, saying that tenants were “facing an immediate need now.”Treasury officials responded with the reallocation — but made it clear the well was running dry, and states would soon have to make hard choices by using their own revenues, or other federal pandemic relief funding, to bankroll anti-eviction initiatives that might have been buoyed by President Biden’s stalled social spending bill.“The emergency rental program has helped keep millions of families in their homes, reducing the economic costs of the pandemic, and built a nationwide system for eviction prevention that didn’t exist before,” the deputy Treasury secretary, Wally Adeyemo, who has overseen the implementation of the program, said in an interview.“As these funds run out, Treasury is encouraging state and local governments to invest in long-term strategies to prevent evictions and build affordable housing, using other resources,” he added.The program, initiated under the Trump administration and ramped up by Mr. Biden’s team, got off to a sluggish start, as state governments struggled to create new systems to process applications, determine eligibility and distribute the cash.But by late 2021, most local systems were up and running, thanks in part to White House guidelines relaxing verification requirements.The enormous infusion of cash, coupled with federal and local eviction bans, helped prevent or delay about 1.35 million evictions in 2021, according to an analysis published last week by Princeton’s Eviction Lab. Evictions have risen in recent months in some cities but remain below the levels predicted when the pandemic first struck.Most of the aid that the Treasury Department is clawing back comes from states in the West, Midwest and New England with relatively high per capita incomes and low percentages of renters per capita. But part of the money is being pulled out of some of the country’s poorest states, where local officials were unable, for various political and logistical reasons, to disburse the funds.Alabama, for instance, is losing $42 million from a total allocation of about $263 million. A spokesman for the state’s housing agency provided a memo from state housing officials claiming that the Treasury Department “did not consider that Alabama has a lower proportion of renters to homeowners” in making its aid decisions, and that an overall lack of need put “downward pressure” on applications.But applicants and housing groups have complained that the state has made accessing the money difficult, and that a company hired to run the program rejected a large percentage of low-income tenants.West Virginia, which has been slow to distribute a range of federal food, housing and anti-poverty aid during the pandemic, was forced to return $39 million despite recent efforts by state officials to encourage more renters to apply. A spokesman for Gov. Jim Justice of West Virginia, a Republican, said the state was “simply not a renter state,” adding that the program “was clearly designed with Manhattan in mind — not rural America.”And Arkansas, which took months to organize its effort, is giving back $9 million, according to the tally provided by the senior administration official.The Biden administration had hoped to avoid shifting funding across state lines, opting instead to negotiate with governors to send unspent aid to counties and cities in their own states. Late last year, the White House persuaded Arizona, Georgia, Louisiana, Wisconsin and other states to voluntarily shift about $875 million to the cities and counties in their states that needed the money most.Yet administration officials are less concerned about offending state officials that have lost funding than tamping down the expectations of Democratic governors who want them to claw back even more.Gene Sperling, who oversees the Biden administration’s pandemic relief programs, said that the program was on track to help around five million renters, and that the largest complaint now was that “the funds are moving out so swiftly that there is very little left to be reallocated.” More